ASIC confirmed some widely held industry rumours about a second Big Four bank suspected of manipulating Australia's short-term bank bill swap reference rate by announcing yesterday that civil penalty proceedings have commenced against Westpac Banking Corporation.The BBSW is the primary interest rate benchmark used in Australian financial markets, administered by the Australian Financial Markets Association. In September 2013, AFMA changed the method by which the BBSW is calculated. The misconduct was alleged by ASIC to have occurred between April 2010 and June 2012, prior to the method change.  In the court documents, ASIC has provided selected details of one of the 16 instances that they claim to have identified across that period.ASIC alleges that on these days Westpac had a large number of products which were priced or valued off BBSW and that it traded in the bank bill market with the intention of moving the BBSW higher or lower. ASIC alleges that Westpac was seeking to maximise its profit or minimise its loss to the detriment of those holding opposite positions to its own.ASIC is also expected to keep pushing for pecuniary penalties against Westpac and an order requiring the bank to implement a compliance program.For its part, Westpac said it would vigorously defend court proceedings by ASIC."We reject the allegations made by ASIC and do not believe Westpac, or any employee, has acted unlawfully in relation to the instances detailed by ASIC," the banking group said in a statement via its website.Westpac's group chief financial officer, Peter King, said Westpac took conduct very seriously and had fully cooperated with ASIC in its investigation of bank participants and their trading practices relating to the Australian Bank Bill Swap Rate, including providing over 12 million Westpac documents for review.ASIC has not suggested it has any concerns with Westpac's current practices.  There are also no allegations of collusion with any other entity.The case against Westpac follows on from several other successful prosecutions, notably ASIC's Federal Court legal proceedings against the Australia and New Zealand Banking Group, which was started an month earlier, on 4 March 2016.Prior to filing against ANZ, ASIC's investigations into misconduct in the BBSW has seen ASIC accept enforceable undertakings from UBS-AG, BNP Paribas and the Royal Bank of Scotland. The institutions also made voluntary contributions totalling A$3.6 million to fund independent financial literacy projects in Australia.Neither party was prepared to add any further comments as the case is now underway.